Discuss about the case study Business Sustainability for Capability Specific Level.
Sustainability is the capability to continue at a specific level for a particular time by utilizing the potential resources. The perseverance of systems and procedures has become more and more essential to the business entities (Ahmad & Mahmood, 2015). During the assessment, I identified that sustainability involves a continuation of a definite behavior indefinitely that considers three pillars i.e. environmental, economical and social sustainability. However, in recent years as the competition among the industries are increasing, issues regarding sustainability also arising enduringly.
For Instance ConAgra Foods, one of the biggest food entities failed to maintain its sustainability strategies towards environmental factor. In the year 2006, it was reported by CERES that the company failed to perform efficiently for environmental benefits. Another company, NRG Energy was reportedly discharged pollution that used to effect environment. So it can be said that sustainability is an essential factor that each company should adhere to (Ahmad & Mahmood, 2015).
However, it is important to identify the issues that obstruct the sustainability of the business enterprises as well as their growth in the industrial sector. Hence, I evaluated certain frameworks that measure the level of performance to be sustainable or ensuing sustainable growth by the organizations. One such accounting framework I selected to measure the performance level is called Triple Bottom Line (TBL). It is the approach to identify the company’s business position with respect to social, environmental and financial which sometimes referred to as 3Ps- people, planet and profits. Measuring the profit in financial term is a common approach that every company follows for the accounting period but the challenging job is to determine the value with respect to people and planet (Smith, 2016).
One of the major challenges in measuring the values of environmental and social factors I found is lack of common unit to quantify. For example, profit or financial factor is measured in the units of currency (dollar, pound or euro) but there is no definite unit to determine the social and environmental values.
Another significant strategy that I could evaluate to sustain the business is sustainable capital for five essential areas that contribute to the organization’s performance. These five forms of capital used in business are:
- Financial capital
- Manufactured capital
- Natural capital
- Human capital and
- Social capital
Most of the people think about financial capital i.e. the money used for funding the business operations, when we talk about the term capital. I understood that the human, social and natural capital is of equal importance for the entities that develops the performance the companies in every aspects. But, many companies face the challenges in determining the capital requirement and values they are generating because it is difficult to quantify the exact value of human, natural and social capital that are intangible assets by nature (Bocken, 2015).
Planning and executing an effective business strategy is critical and complex that requires the evaluation and analysis of various frameworks (Ciegis, Ramanauskiene & Martinkus, 2015). In this regard, I analyzed that Dexter Dunphy worked out the six phases of sustainability called The Dunphy scale that determines the position of the organization and its relationship with the society. The six phases used by Dunphy that business approaches to sustain in the market are as follows:
2. Non- Responsiveness
5. Strategic sustainability
6. Sustaining corporation
Sustainability Phases used by Dunphy states the issues that companies are facing while maintaining business sustainability and I found that the companies belief on their existence for maximization of profits. Many organizations lack responsibility towards the ethical factors, environmental factor and society factor that causes in failure to meet the required business standards. I evaluated that the Companies often fail to deal with wellness and benefits of society and employees that affects the growth of business in the long-run (Shaw et al., 2015).
I concluded from the study that the management of the organizations has to be very cautious while planning the business strategies to sustain and develop at a particular level. Its objectives should not only to maximize the profits, but to create values for people and planet as well. The concept of sustainability made me understand that if the organization is following triple bottom line approach, then it can compute its elements in terms of index that would eliminate the conflicting units issue. Southwest Airlines, reportedly is one of the successful organization in using the TBL approach.
On preparing the assignment, I understood that utilizing the capital value in different forms other than the financial and manufacturing capital is a vital step every organization should follow. Companies can analyze the level of utilization of resources, production technique for measuring natural capital. I identified that human capital and social capital involves awareness of people’s health and knowledge for the society and employees and other stakeholders. I found some companies like Google, Disney, Teachers Mutual Bank are successfully following the approach to use five forms of capital effectively.
Further, I concluded that the evaluation of six phases of sustainability provided by Dunphy has successful results to the companies who adopted the strategy. Each of the phases is categorized as human sustainability and ecological sustainability that helps in determining the business operations towards the employees, society and environment. As per the reports, I found some of the best companies of Australia who follow the ethical business practices are BHP Billiton, Telstra, Westpac and IAG.
Ahmad, N. L., & Mahmood, N. H. N. (2015). The Concept for the Demand of Green Events from the Perspective of Attendees for Business Sustainability.Advanced Science Letters, 21(6), 1826-1829.
Bocken, N. M. P. (2015). Sustainable venture capital–catalyst for sustainable start-up success?. Journal of Cleaner Production, 108, 647-658.
Ciegis, R., Ramanauskiene, J., & Martinkus, B. (2015). The concept of sustainable development and its use for sustainability scenarios.Engineering Economics, 62(2).
Kim, D. B., Shin, S. J., Shao, G., & Brodsky, A. (2015). A decision-guidance framework for sustainability performance analysis of manufacturing processes. The International Journal of Advanced Manufacturing Technology, 78(9-12), 1455-1471.
Shaw, G., Walters, R., Kumar, A., & Sprigg, A. (2015). Sustainability in infrastructure asset management. In Proceedings of the 7th World Congress on Engineering Asset Management (WCEAM 2012) (pp. 525-534). Springer International Publishing.
Smith, M. (2016). Business Sustainability and the Triple Bottom Line: Considering the Interrelationships of People, Profit, and Planet. In Learner-Centered Teaching Activities for Environmental and Sustainability Studies(pp. 181-186). Springer International Publishing.